Recent studies by the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) have found that the primary cause of recent insurer failures and 'near misses' were as a result of poor management decisions and inappropriate risk management procedures. The Solvency II Directive proposal has a clearly stated aim of ensuring soundness of insurance and reinsurance undertakings across the EU, in particular to ensure that they are able to withstand periods of difficulty.

Solvency II represents a major overhaul of the capital adequacy regime for the European life insurance, non-life insurance and reinsurance market. It aims to replace the current Solvency 1 capital and risk management regime with a regime that better reflects the true underlying risks of each insurance firm. Insurers will need to rethink how they measure and manage their future risk and capital to safeguard their business and policyholders.

OAC Actuaries and Consultants have a wealth of experience in insurance valuation, provision of software solutions and embedding sound end-to-end processes for clients. We can offer specialist advice on how you can best manage the new regulatory framework in your firm.

OAC is currently producing a Mo.net template model specifically for QIS5. This QIS5 model is available on Mo.net - our affordable, next generation, powerful and easy to use financial modelling software.

The model contains all the functionality needed to calculate:

life insurance best estimate technical provisions;
risk margins calculated on Cost of Capital basis as specified in QIS5;
SCR calculated on QIS5 standard calculations; and
MCR as specified in QIS5.

The QIS5 template model can be easily customised to suit your requirements. OAC can help with customising the model to fit your products and provide advice on determining appropriate inputs and assumptions.

Mo.net provides the ideal platform for modelling some of the very complex financial projections required. The following lists examples of the scope of Mo.net's Solvency II actuarial applications:

Realistic valuation models.
Internal capital models.